The Occupy Wall Street crowd fails to appreciate the considerable good that is done on the Street. The initial public offering of Groupon (NASDAQ:GRPN) should serve as a reminder of one of the system’s benefits.
I find the Occupy Wall Street crowd to be a bit disingenuous and misguided in their demonstrations. Oh, I get the frustration, believe me. Even within the financial industry there are many professionals dissatisfied with the state of their business. A few bad apples have tainted what should be viewed as a crown jewel of our capitalist system.
Think about all of the good that Wall Street has accomplished in both the public and private sector. For example, the funds provided by municipal bonds allow state and local governments to provide widely used and needed essential services. On the public side, the number of companies funded by Wall Street accelerated innovation and technology that created vast sums of wealth and more importantly jobs.
Are there problems with how Wall Street goes about its business? Sure, but nothing is perfect and our system of capitalism has far more benefits than disadvantages. Don’t begrudge those making money on Wall Street. They have earned it.
So instead of occupying Wall Street, put your money and efforts to better use — occupy these three Wall Street firms.
The cream of the crop on Wall Street has been struggling since the European debt crisis reared its ugly head this summer. Reflecting the difficult environment, shares of Goldman Sachs (NYSE:GS) are down 24% since the beginning of July.
Goldman Sachs reported an operating loss of 84 cents per share in the most recent quarter, missing estimates by a whopping 78 cents per share. The big miss has tempered enthusiasm for the fourth quarter — estimates now are at $2.86 per share for the period, as opposed to $4.61 projected 90 days ago.
Given the big run-up in stocks in October, look for Goldman to come closer to the $4.61 estimate. For the full year, the company is expected to make $6.17 per share. Analysts look for profits to double in 2012 to $13.79 per share. At current prices, Goldman trades for a paltry eight times next year’s earnings.
The stock is one to occupy today in advance of what I expect to be a very strong earnings quarter on a market more conducive to investment banking.